If truth be told the Liberal and Liberal Democrat party has always in its highest echelons consisted of two tribes: Asquithians and Provincials. The creative and social tension that existed when Lloyd George and Asquith vied for power has never altogether disappeared.

* Asquithians are well connected (city, army, bar, media), internationalist and economically liberal and at times libertarian;
* Provincials have strong community roots, favour social liberalism,regional autonomy and at times a degree of moral conservatism.

Jeremy Thorpe was the very archetype of the former. Cyril Smith the latter.

However there is little doubt that the tribes recognise each other. Most Asquithians know and take uncanny cognizance of the background – schooling, pedigree of other Asquithians. Provincials on the other hand are more interested in the humdrum, political machinery that underpins their fellows.

The party is normally led by someone of the Asquithian tradition – Thorpe, Ashdown, Clegg et al, or those in awe of it (Campbell). Analysis of the educational backgrounds of recent Lib Dem shadow cabinets would repay attention from students of social diversity.

In normal times there is a creative tension between the two tribes around such issues as the role of markets and the function of the state. It would not be unfair to say that Asquithians in recent times have hoped to wean the party away from what they saw as an unhealthy addiction to statist solutions.

However we are not in normal times.

Free markets in capital inadequately restrained by the state have unleashed havoc in every area of the country and in every aspect of economic life. State ownership and regulation is touted as a solution and not an evil. The state, far from being opposed to liberty, is seen as the only means to protect ourselves from the blind, unfeeling tyranny of the market. The Provincials find themselves on the same page as the Asquithians.

This is potentially a golden opportunity for the party to act with one soul, and carve out a vision for the country, both inspiring and realistic, where the state becomes the embodiment and preserver of freedom – not the restraint upon it. We are not quite there yet but we have a leader in Nick Clegg who has the charm and the intellect needed to seize the moment.

22 Comments

I think there are very few social conservatives left in the party today.
I remember in the mid 1980s there was still about 1/4 of the party who did not agree with gay rights. Today is must be about 1%.
This is more to do with changing times, and the post 1960s generations.
The failure of free markets has I think put a break on the free market fundamentalism that appeared to be sweeping the party until recently.

Very interesting analysis. But I don’t think I’d draw the same conclusion. It seems to be getting clearer by the day that the state solution to the banking crisis hasn’t worked. That’s not a great recommendation for state interference.

Of course, it isn’t a choice between a large state & the reign of the bankers. There are companies competing & operating very well in markets which are along mutual lines. You don’t, & won’t, see any sign of John Lewis, Co-Op, Britannia & them having the same sort of problems as are afflicting the Fred Goodwins of this world. They might even come to do better after the recession than before it, given the right environment for them.

I still say that I support a small state because the state tends not to be particularly good at what it sets out to do. I accept the need for regulation but smart regulation isn’t the same as reams of red tape & that, & never was. As someone who has been involved in environmentalism for a very long time, I can say that while I support in a broad-brush sense things such as the establishment of National Parks (& in fact was among the voices calling for the South Downs National Park as has just been established), two considerations come in:

a. The micromanaged regulations are often clunking, & harm the interests of those concerned.

b. The government so often pick losers. They will jump on any “biofuel” that they can call green, even though half of them aren’t. They drool over the Severn barrage, GM foods, & God knows what else they think will be a painless way of getting votes.

To say “X is good, let the government impose X” won’t work if the government makes a terrible mistake deciding what is or isn’t desirable, as they do so often, or if they botch the implementation.

I am not a libertarian as I think there is often a call for the state to act. But it will have to tread a lot more carefully than the likes of Brown ever have.

Re: your distinction between Asquithians & Provincials, it is fascinating. Despite my username, I think I am more in the latter. I can imagine myself at some nonconformist meeting in the 19th century haranguing everyone.

We must not lose sight of the working-class tradition of self-improvement & various forms of cooperation to fight for a better life & a better world. Even the original Labour party was formed as an autonomous movement of the working man, not only apart from the state but in fact in bitter opposition to the state’s mechanisms of repression.

This tradition is almost totally lost in the Labour party but it exists on the left. This is why I call myself left-wing in these times, though I am often viewed as not being of the left as I do not support statism.

This is a good form of words to use if you want interpret the failure of banking as a failure of capitalism as a whole.

It is not clear to many how the present crisis represents a failure of the capitalist model for running shops, manufactures and so on. But perhaps that is largely contingent on free capital markets. (I don’t think it is, but this seems to be the thesis.)

OK so let’s grant that, purely for the sake of argument. What sort of regulation of capital markets would this newly united party propose?

Because it seems to me utterly futile to argue in principle for some sort of regulation of something, if it is not clear what specific regulation for what end, you are talking about.

“You don’t, & won’t, see any sign of John Lewis, Co-Op, Britannia & them having the same sort of problems as are afflicting the Fred Goodwins of this world.”

Well, Asquith, actually you will – Brittania was exposed to sub prime lending and had high levels of wholesale funding from the money markets. As a result it is being merged with the Co-op bank. It is one of four building societies that has recently been merged or has gone to the wall.

I strongly support mutuality but it is little more of a guarantee for financial prudence in itself. Lets not pretend otherwise.

I think Johns Analysis is very interesting but obviously a bit stereotypical. As an ingrained provincial
who thinks a free market solution (ie a market where everyone has a free chance to create wealth not some kind of oligarchs paridise) is the only way to achieve a fairer society and who is a passionate internationalist, I’m not sure I fit in with this analysis.

In terms of social conservatism, whilst there are a lot less Lib dems opposed to issues such as gay equality, I feel we still have a lot of somewhat “priggish” members who disaprove of members of the public having fun, especially when its not the type of thing enjoyed by Guardian or Independent readers!

* Asquithians are well connected (city, army, bar, media), internationalist and economically liberal and at times libertarian;
* Provincials have strong community roots, favour social liberalism,regional autonomy and at times a degree of moral conservatism.

OK, so I’m well connected (well, public school and oxbridge, which seems to be what you’re getting at), internationalist, favour social liberalism and regional autonomy. How do I work?

John Pugh’s characterisation of the party as having always been divided between ‘Asquithians’ and ‘Provincials’ is true in terms of snobbery but not economic theory.

The division within the Liberal Party (and later the Liberal Democrats), from the time I joined in the mid-70s through to the beginning of this decade, was essentially about the dispersal of power, not economics.

Throughout this period, the Liberal Party’s right wing was not economically liberal, let alone libertarian (its economics were Butskellite but that’s beside the point). The party’s right was instead characterised by a belief in the ‘top-down’ management of the party by a Westminster-based elite, which imagined it always knew what was best for the rest of us. It believed that the job of the party’s members was to shut up and deliver the leaflets.

The party’s left, in contrast, was characterised by a concern for popular disillusionment with politics, a belief in the dispersal of power and a preference for the ‘bottom-up’ management of the party.

The pre-merger SDP was allied with the Liberal Party’s right in this respect, and the argument throughout the Alliance years and the merger negotiations was therefore mainly about party constitutional issues, not economics.

There had been no economic liberals in the Liberal Party since the departure of the notorious Oliver Smedley in 1962, and there were very few before then.

The presence of economic liberals and libertarians in the Liberal Democrats today is therefore not part of some continuous ‘Asquithian’ tradition. It is a new development that began only at the start of this decade, and it owes more to ideological trends in the USA since the 1950s than it does to any historical British liberal tradition.

Finally, congratulations to John Pugh for raising the issue of class. It’s about time! We hear a lot about ‘gender balance’ but little about the fact that 40% of our MPs were privately educated. But then that’s the problem with identity politics – it distracts from class, which remains the main determinant of an individual’s success.

The “market” (which was not properly free) was working – it was sending failing banks to the wall, like they deserved. And the state stopped it and perpetuated the unfree market’s bad decisions. Wish I’d listened to Charlotte on this now. Would have been so, so much better to bail out the individual savers.

Neil Bradbury, I invest with Britannia, & it certainly has made unwise decisions which will hopefully not be repeated. But it is precisely this which has inspired a return to the roots. The merger with Co-Op, which I supported, was not due to any necessity but because a joint organisation would be stronger, which is why both companies are enthusiasts.

I do agree that mutuals don’t magically have a halo over them, just saying that they perform better than most in these times & are an idea whose time has come.

Am pinning my hopes to long-term cultural changes which will hopefully come out of this recession. I fully agree we need to acknowledge that the “good times” weren’t good at all, & even if they were they were as much a house built on sand as the 1970s economy.

The split that John Pugh puts his finger on between these two Liberal tribes is older than Asquith. It is how the Liberals lost Joe Chamberlain and his friends. But is it evident nowadays in the LibDems? Paddy Ashdown is a great internationalist, but his provincial aspects show and make the old-fashioned Establishment wary of him as well as respectful. The provincial streak is stronger in Charles Kennedy – being happy with being called ‘chat-show Charlie’ is very un-Asquithian. Clegg, Huhne and Cable have the Asquithian virtues but keep puzzling commentators by facing issues with a confoundedly pragmatic, provincial attitude to reality. (Incidntally, I am puzzled as to which is less Asquithian: taking paternity leave or relishing being on Come Dancing.)

As to free markets, I do not think that any LibDems really differ from Adam Smith’s original view: free markets can serve us wonderfully well(and we would all add, better with mutuals in them), but can also be very bad masters.

As for ‘the state’ I think it is a word LibDems are unhappy with. We know it is the governemnt’s job to keep the markets in order; and a right mess they have made of it. We also know that the government has been getting its fingers tangled in a lot of things that should be done, and would be better done, locally. Further, we see the government getting its nose into our personal doings which are no business of the government’s. At the other extreme, the government cannot ever seem to get what ought to be our pragamtic and useful participation in the EU and wider international organisations right. Part of all that is that they are stuck in some notion of the nation state that we LibDems do not understand, which seems to have nothing to do with whatever Constitution Britain has, and does not fit when there are local and global problems to manage.

We LibDems know what our country is, and we want to serve it. We know what our local community is, and we want to make it a better place to live. We know this earth is the planet we live on, and we want to co-operate with other peoples to preseve and enrich it. We know that capable and accountable government can be an essential servant in achieving what we want to do; but a governement that thinks it is ‘the state’ is likely to be more bad master than good servant. In the back of our minds we remember:

“Holy Church or Holy State or Holy People’s Will, it ends in Wholly Slave.”

I think that nowadays the Party does act with one soul. We don’t, and probably never should, speak with just one set of words. But ‘the state’ is a term that it is very hard to fit into the way we think and feel.

Because it’s already in law that the government guarantees individuals’ savings up to £30k (as was; think it’s £50k now). And governments must keep laws which defend the rights of individuals; that’s a fair enough function of the state.

People could then have reinvested it as they wished – and one would expect to see a sudden upturn in the business of credit unions and building societies. The unhealthy banks would have gone to the wall and the market been refreshed with a new generation of fewer risk-taking businesses.

Mea culpa, I think I’ve been kind of kidding myself that there was sound reasoning behind this way of doing it. But there really wasn’t.

It’s extraordinary to me that Simon says “there have been no economic liberals in the party since 1962″.

If so, it’s a strange kind of liberal party, since ‘economic’ liberalism to me is indivisible from liberalism more generally.

But I’m not sure it is true, unless ‘economic liberal’ is taken to mean an advocate of complete laissez-faire – in which case there have been hardly any economic liberals in any party, ever.

I would count Jo Grimond as an economic liberal by instinct, if not consistently in the policies the party espoused during his leadership. But his belief in markets, voluntary action, decentralisation and the dispersal of power place him within a broadly liberal economic tradition.

As he said in 1957: “Neither the Government nor the local authorities make any wealth or have any money of their own. If we want them to spend more and more we have to pay. The remedy is in our hands. Stop running to them asking them to do this, that and everything under the sun – and demand instead that they stop doing and spending so much.”

And in 1978: “It is not capitalism that is in crisis. It is Socialism that is in collapse. The faith has vanished. The principles are shattered. It won’t do for Liberals merely to say they will put on the brakes. Even if you slow down the Gadarene swine, they will go over the precipice eventually.”

In 1980 he observed: “The state owned monopolies are among the greatest millstones round the neck of the economy…Liberals must stress at all times the virtues of the market, not only for efficiency but to enable the widest possible choice…Much of what Mrs Thatcher and Sir Keith Joseph say and do is in the mainstream of liberal philosophy.”

And in 1981: “We should not delude ourselves into thinking that an incomes policy is other than a serious infringement of freedom…Nor have the Liberals explained how it is to be worked, and even if they had, it is certainly not a permanent answer to our economic troubles…At present, the Liberal-Social Democratic Alliance occasionally looks too much like a half-way house on the old road to state socialism. It will spend more than the Tories but rather less than Labour…Such compromises may win votes, but they will not improve the country.”

Or in 1982: “We have to reduce the public sector, the state-run sector, and hand it over to other bodies. The economy is probably unmanageable so long as the state attempts to do so much. The Liberals have not given nearly enough thought to the question of the bureaucracy of the state, what is suitable for the state to run…”

Of course, these are selective quotations and I realise there are plenty of counter-examples. Much the same exercise could doubtless be done with someone like Vince Cable.

But they should remind us that economic liberalism plays an important part in our Liberal inheritance.

The other point, of course, is that ‘markets’ and ‘capitalism’ are not synonymous, although they are usually connected.

And being pro-market or supportive of free enterprise is not the same as being pro-corporations, many of which rely on state protection or implicit subsidies to rig the market, restrict competition and shut out new entrants. This is a point which Jo Grimond understood very well.

Alex Sabine writes: “It’s extraordinary to me that Simon says “there have been no economic liberals in the party since 1962″.”

Well, Alex, I was there and you weren’t. There was no economic liberal movement in the party from the 1960s to the 1990s, and it was very much a minority pastime before then.

Perhaps the reason that Alex finds this extraordinary is the determined attempt in recent years to rewrite history, by projecting current disputes onto the past.

The Orange Book, for example, made the false assertion that the party had somehow been ‘stolen’ from economic liberals. Meanwhile, some on the right wing are claiming that the disputes in the 1980s were between economic/classical liberals in the Liberal Party who opposed merger with the SDP, when in fact it was the left wing of the Liberal Party that was most sceptical of the SDP.

Jo Grimond made the quotes attributed to him but he was broadly in the social liberal rather than classical liberal camp. Otherwise why would he have inspired generations of radicals within the party?

The fact remains that the Liberal Democrats – and the Liberal Party before them – have been firmly in the social liberal camp since the days of 1906 Liberal government, if not before. That does not mean that the party opposes markets, rather that it believes in positive freedoms (such as healthcare and education), not just negative freedoms. We see markets as a useful tool, not an object of religious devotion. We don’t believe that markets trump all other values.

The emergence of classical liberals and libertarians on the fringe of the Liberal Democrats is a recent phenomenon, not part of some ancient lineage with a prior claim on the party. Attempts at historical revisionism won’t alter that fact.

It seems to me that the social liberals of 1910+ were standing on the shoulders of classic/economic liberal giants. To borrow a metaphor.

Those who fret about the “re-emergence” of economic liberalism in the party seem to wish to climb down from those shoulders lest they see something that frightens them. And not seeing it will make it go away.

Simon Titley says: “Well, Alex, I was there and you weren’t. There was no economic liberal movement in the party from the 1960s to the 1990s, and it was very much a minority pastime before then.”

That’s rather more qualified than your original claim, is it not? I’m not suggesting it was other than a minority position, but then there wasn’t much of an ‘economic liberal movement’ in the Tory party from the early 1950s to the mid-1970s either, because market economics were widely regarded as anachronistic. We may able to enter another of those periods, although I hope not.

Tempora mutantur, nos et mutamur in illis.

Simon goes on: “The Orange Book, for example, made the false assertion that the party had somehow been ’stolen’ from economic liberals.”

As I recall it lamented the way the Lib Dems had become estranged from liberal economics, and argued that economic liberalism needed to be reasserted alongside the other strands – personal and political – to give the party a more coherent purpose and narrative. (It also argued against illberal ‘nanny state’ policies outside of the economic sphere.)

Central to the argument was that, while there may be tensions between them, ‘economic’ and ‘social’ can be complementary.

Economic liberalism can provide the tools to better deliver social liberal ends – eg via school vouchers weighted in favour of the poor, personal budgets in health and social care, cap-and-trade/road pricing etc.

Equally, most economic liberals have no problem with the state having an ‘enabling’ role to widen individual opportunity and choices (although we do have a problem with the state’s relentless mission creep).

To present economic and social liberalism as polar opposites is simplistic and wrong.

Simon adds: “Jo Grimond made the quotes attributed to him but he was broadly in the social liberal rather than classical liberal camp. Otherwise why would he have inspired generations of radicals within the party?”

He clearly understood and articulated the insights of classical liberalism (‘standing on the shoulders’ as Joe says). I agree he had radical instincts in opposing class privilege, but it is strange to see this as at odds with economic liberalism. Indeed he recognised that one of the things ossifying society and preserving the class system was the cosy corporatism that the likes of Hayek warned of.

I also find it amusing that the self-styled ‘radicals’ in the party are often the most conservative in defending the social democratic state and all its works.

Simon further says: “That does not mean that the party opposes markets, rather that it believes in positive freedoms (such as healthcare and education), not just negative freedoms. We see markets as a useful tool, not an object of religious devotion. We don’t believe that markets trump all other values.”

You’re building straw men on top of straw men here…

Which economic liberals in the party don’t believe in healthcare and education? Indeed it is precisely the failings of state-run monopolies in these areas that leads them to favour more liberal solutions.

I do not see markets as ‘objects of religious devotion’. But they are the best mechanism yet devised for satisfying our material needs and wants in conditions of freedom.

‘The market’ is simply the sum total of all the inclinations and judgments of everyone who has a stake in it.

Liberals should, and do, stand for extending those stakes to those who don’t have them now (for example by tearing down trade barriers that keep the Third World condemned to poverty).

“We don’t believe that markets trump all other values.”

This is pretty meaningless, since the market is not a “value” but rather a system of free exchange. In and of itself, it is value-free; the values come from the actors within it (ie people).

And finally: “The emergence of classical liberals and libertarians on the fringe of the Liberal Democrats is a recent phenomenon, not part of some ancient lineage with a prior claim on the party. Attempts at historical revisionism won’t alter that fact.”

You were originally talking about the history of the Liberal Party, in which I would suggest classical liberals were more than a ‘fringe’ group for much of its history.

There has indeed been a welcome re-emergence of economically liberal ideas within the Lib Dems, although I wonder sometimes if it is more than skin-deep. But to present their proponents (who included Vince Cable as well as David Laws, Clegg and co) as some kind of malign entryist sect strikes me as bizarre.

The Asquithian/Gladstone Club Liberal versus Provincial Liberal divide has often led to confusion on have/have-not issues.

However activists’ views on these issues also depend upon which is the local main opposition party.

So, in the 1970s, Assemblies in the South tended towards David Steel and Anti-Conservative policies of the Left. Assemblies in the North tended towards John Pardoe and Anti-Labour policies of the Right.

Such divisive factors were compensated for by focusing on non have/have-not issues including regionalisation, the EEC and the EU, which it became a kind of dogma disturbing heresy to oppose from a EU-sceptic point of view.

John Pugh’s fascinating but somewhat oddball stereotyping of us all as Asquithians or Provincials has unfortunately distracted attention from his key message about:

“a vision for the country… where the state becomes the embodiment and preserver of freedom – not the restraint upon it.”

I think this hits the nail on the head.

Those of us who get categorised as “statists” are actually a pretty open-minded moderate bunch. You won’t find many Polly Toynbees or Gordon Browns – that is to say, people who think the state is the answer to life the universe and everything – in the Lib Dems. You will find people who recognise that the state, with all its faults, does sometimes have a vital role to play, and it is vital to have the right policies to play it properly.

I don’t see the same sort of balanced approach from many of the “economic liberals” in this party. To argue that state “interference” in the banking crisis was wrong, and that we should have let the free market go its own sweet way and allow the total collapse of the national economy, seems to me quite simply outrageous. It is crass dogmatism, on a par in its stupidity with the Maoist theory of making a Great Leap Forward by forcing millions of people out of the cities and into agricultural labouring.

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